ONE LAST TRIM

01.28.12

Greece Inches Toward Debt Deal

Simon Dawson, Bloomberg / Getty Images

A debt “haircut” didn’t do the trick, so Greece’s leaders have been pressing creditors to shave off just a little bit more of the country’s crippling national debt. After weeks of tense negotiations, which broke down several times as the International Monetary Fund also pressured bankers to accept major losses, Greek leaders and representatives from the banks’ lobby are crawling toward a deal. The initial haircut reduced the value of Greek debt by 50 percent, and bankers have now agreed to an additional trim that would take that number up to near 70 percent. As they negotiate, Greece also faces pressure from Europe to slash spending ahead of its next bailout payment, which is difficult because the country’s economy has collapsed.